Terms of Use Agreement: What Is It & Do You Need It?

A terms of use agreement defines rules for the use of a website. Sometimes referred to as “terms and conditions,” this document includes disclaimers and notices clarifying the limit of the website’s or business’s liability to the visitor. It also often displays other information about website ownership and copyright to help protect a website’s content. And it may contain a privacy policy explaining how you collect and use customer or visitor information. Because of the specific language and the diversity in the range of websites’ needs, these documents should be created with the help of legal experts for maximum legal protection.

Clickwrap vs. Browsewrap Terms of Use Agreements

Some sites present a pop-up or a landing page requiring visitors to agree to terms and conditions before proceeding, which is called a “clickwrap agreement.” It’s more common to find websites with a “browsewrap agreement.” With these, visitors are not prompted to view or to agree to anything but can access a terms of use page by browsing for a link if they so choose. In this case, a hyperlink or button is often buried at the bottom of a home page and remains unseen by most visitors.

One middle ground option for presentation is a subdued pop-up or banner with a notice that by continuing to use the site, a user agrees to the terms of use. These often contain a hyperlink to the page with the terms of use. Regardless of presentation, each type of agreement contains much of the same content. Either way, if website visitors don’t approve of the specific conditions set forth in the agreement, they are free to leave.

1. Limiting Liability From Errors

Protecting yourself and your business is one of the most important reasons to have a terms of use agreement. Most agreements contain a clause or disclaimer aiming to lessen the website owner’s liability from errors in the website’s content. In theory, this reduces the strength of any case a website visitor could make for injury or property damage if allegedly impacted by erroneous information.

The internet is full of websites with flawed information. The American legal system makes it relatively easy for businesses and consumers to sue each other in court over a negative experience or impact. It’s also relatively common for companies to be sued over baseless claims even at times when no wrongdoing occurred. Website owners should be prepared for this and take seriously the inherent (and sometimes unfair) risks of operating in such a public way.

2. Limiting Liability From User Content

If your website involves user interactions such as a comments section, social media functions, chat rooms or forums, a terms of use agreement can serve to insulate the website from user-generated content. This is especially important if users can freely upload digital media of their own to an online platform.

While a terms of use agreement may set rules about what content is and isn’t allowed, it’s just as important to explicitly define users as third parties whose content the website is not responsible for. Even a site such as a blog that centrally reviews its content before posting may clarify that the website or company itself isn’t represented by and doesn’t endorse views expressed by contributors.

Limiting liability from user content via a terms of use agreement doesn’t necessarily excuse a website from the responsibility to monitor and moderate user content.

3. Protecting Content

Websites and companies use terms of use agreements to communicate rules about the copying and reproduction of their web content. “Protected content” can, of course, include media such as images, music and videos, but it also applies to logos, written commentary, data and other forms of digital media.

Language addressing these issues often takes the form of an intellectual property clause claiming ownership of content and informs visitors of protection by copyright, trademark, patent, trade secret or other intellectual property laws. Some terms of use also include language on “permitted use” that speaks to what visitors can do with its content.

4. Preventing Abuse

Many terms of use agreements ban malware, bots and spiders from accessing a website. Websites with user interactions usually also attempt to ban spamming or other malicious user activity often considered abuse. It’s common for a terms of use agreement to include a termination clause describing what it takes to be banned for abusive conduct.

5. Declaring Governing Law

A terms of use agreement should state under which country and state or province laws the website aims to operate. In the event of a legal dispute, this can be especially important for websites representing businesses with international reach, as complications arise when a site facilitates transactions and other interactions among people from different countries.

A “governing law clause” or “choice of law provision” in a terms of use agreement merely expresses a preference for which laws will apply to the website’s activity, but courts do tend to value these declarations and treat them favorably. While courts examine the issue from all angles in a dispute, a governing law clause can be an important factor.

The most effective terms of use agreements are created under the guidance of legal professionals, as they’re backed by expertise.

The nature and scope of the site will likely determine how serious a website operator should be about the terms of use. To get a better sense of what the agreement might look like, website owners can check out examples from other successful websites in the same category or industry. It’s not advised to copy another site’s agreement and simply change some names. In general, the more detail provided to visitors about the website’s guidelines, the better.

While terms of use pages vary widely in scope and content, these are some of the most commonly found components.

• Limitation of liability
• Website use guidelines
• Definition of impermissible conduct/abuse and termination clause
• Governing law clause
• Privacy policy, if necessary
• Intellectual property clause
• Permitted use clause
• Information on the use of cookies
• Disclaimer that terms of use are subject to change

Every business and individual faces specific liabilities based on the nature of the business or operation conducted. A website requires proactive strategies to effectively manage the risk inherent in its operation. Websites provide a fantastic tool to help increase publicity and engagement but also deliver wider legal hazards, as well.

Take seriously the need to anticipate legal bumps in the road and to determine which disclaimers and information are necessary for protecting your website. At the same time, understand that terms and conditions are not always as legally binding and enforceable as they aspire to be. These documents are best viewed as a way to minimize but not eliminate liability and as a way to “cover one’s bases” as best as possible.